Starhub - Which Way Will It Go?

Starhub has been stubbornly clinging on to its downtrend for more than two months now. Closing three in fact. Twice I blogged about a breakout in the making and twice it didn't materialize. Good news didn't seem to matter to the public who were already set in their negative sentiment (see Starhub: Breakout in the Making?). Even the 100 day moving average support, which I had hope in to hold the fort, so to speak, fell apart (see Starhub: Opportunity to Buy In May Be Near at Hand) resulting in prices crumbling quickly thereafter. 

To make matters worst, candlesticks in the last three days show strong pressure from above determined to push prices down further, with 2 gravestone dojis forming in succession, one longer than the other. However, prices were unable to penetrate $2.53 for the two consecutive days before that perhaps forming a floor beneath. In fact if we look back at the charts, we would see that $2.53 did provide some support in October last year.

Also, prices, at the moment, seem resilient and intent on holding firm. However we didn't see a lot of buyers a day after that long ugly black candle day back in Dec, so I'm not so sure about the reliability of the support despite driving prices back up. 

And since all looks quite ill, now I'm just toying with this idea, but doesn't that formation remind you of a heads and shoulder, albeit lopsided? Or would this just be a manifestation of seeing what wants to see to fit the scenario, in this case negativity?

Well if that's the case, we should worry if prices break the neckline at where the current support lies. If that happens, we could see prices plummet to $2.48 or even to its 200dma. Just something to take note of.

But that said, prices seem to be withstanding the hammer blows from above for now and as such a triangle may form and it could be really soon before prices breakout from its downtrend and head upwards especially since price lows are higher and since the triangle really has not much space to run anymore. This seems the more likely of the two formations. Plus when you have to force a formation into the chart, like I did with the heads and shoulders, it usually is wrong. So my opinion is that things could head this direction rather than the other. But I could be mistaken yet again for the third time and strike out.

With a dividend yield of 7.4% and p/e of 13.65, Starhub could be quite attractive as an income stock. However as mentioned before, maintaining its current dividend is something that has analysts concerned.

Perhaps this is a view shared by many and is the reason why share price seems intent on falling lower - to make up for the coming "falling dividend" yet maintaining the yield? The warning bells are chiming. Or are they? 

Senior Guru blogger Drizzt has done a terrific job at analyzing the telcos. You can read more at his blog, Investment Moats on Starhub's yield maintenance (see here), its debt (see here) as well as on how prices adjust due to people determine to upkeep their yield (see here). I guess his blog was voted the Top Stock Market Blog in 2010 for good reason. =)

On other news, Starhub has teamed up in a venture with Japan's Nippon Telegraph and Telephone Corp to jointly build and operate submarine cables that will connect East Asia's business hubs. (You can read the news here.) Though revenues are expected to rise, we can all expect costs will as well. Will this venture increase their free cash flows that will allow Starhub to maintain its dividends yet still leave ample capital to grow is a question I can't answer. Earnings announcement on the 11th of Feb by the way. Stay tune!

Cheers,

~K

P.S. What started out as a quick post turned out to get dragged as I realized there was more news to consolidate. Apologies and thanks for reading to the end. Vested interest btw.

Ascott REIT Still Under Pressure

It's been awhile since I updated the ongoings with Ascott REIT with my last post being more than a month ago (see Ascott's Bounce Unsuccessful for the detailed discussion). In that analysis, I highlighted that "we might see hovering around its current support at $1.21 to $1.23 for the next few days." I also said that prices may "even breech $1.21 to its previous support at $1.20. As volume is still weak I doubt there'll be any testing of the $1.28 resistance any time soon." Here's how that played out.

It's been more than a month and prices have still yet to come close to its previous resistance. Also, although the $1.20 wasn't breeched or reached firmly, prices did briefly touch for two days in a row before leap-frogging upwards for another failed rally.

Prices however remain steadfast with support of the 50 day moving average despite what seems to be quite a bit of pressure from the last three days. Furthermore, a gravestone doji forming yesterday doesn't bode well. So turning to the indicators, it may be possible to get some clues as to what can we expect next.

%R and OBV has dipped downwards with %K looking to be doing likewise. Also, although volume bars for the MACD seemed to be turning up, the action yesterday brought it back down once more. RSI too, hasn't turned up decisively which doesn't contradict the negative sentiments displayed by the other indicators. Furthermore, volume is lacking so it looks like price will remain weak for awhile.

Looking at the other indicators, P&S shows that momentum is still down. ADX shows no strong trend developing with DI- and DI+ turning downwards. Confusing this is...However Bollinger bands and GMMA have entered a squeeze which could mean a sudden explosion of movement is arriving soon. But the million dollar question is...in which direction?

My take:

It is likely that prices are gonna be stuck in the range of $1.22 - $1.24 for awhile longer. However, as the pressure seems to be like a hammer on the 50dma, it wouldn't surprise me if support at the 50dma breaks and someone will sell out and release his/her shares at a lower price possibly causing prices to dip to their 100dma briefly. That's briefly because there are buyers waiting at $1.20. As such I remained undecided which direction the prices will take when the spurt occurs.

On one hand, if the spurt happens, as hinted by the Bollinger Bands and GMMA, we may see prices catapult upwards like it did previously as indicators are mostly in the oversold region or heading there so there's a good chance that it may spring up instead of down. But if volume is not there to back it up like before, it may just turn out to be another fake rally. On the other hand, pressure from above may see prices drop to the 200dma instead.

With a yield of 7.14%, gearing of 40% and a 5% discount to net asset value or a price to book of 95%, Ascott REIT may be better  and more alluring as a dividend stock especially with backings from Temasek. However, in terms of growth, that remains a question.

Not vested,

~K

ComfortDelgro - Break Out Nearing?

Two weeks ago, in my last observation of ComfortDelgro (refer to Comfort Cab Speeding Up Too Fast?), I gave the opinion that "instead of...dropping back to its 14dma at $1.57, prices will continue hovering for the next couple of days while awaiting the 14dma to catch up with it" and prices would likely "bounce between $1.59 - $1.63" and that "I do not expect resistance to be taken out just yet." Here's the current chart to see how that turned out.

As we can see, prices bouncing around the mentioned range did occur and is still ongoing with resistance yet to be broken. On the downside, my estimate was short of 1 cent, with prices bouncing to $1.64 instead of $1.63. A mild underestimation I feel. However, upon experimenting with the moving averages, I realized that the 20 day moving average was more suitable as it seemed to provide more support compared to the 14dma. Here's the chart below:

That said, it leaves more room for prices to bounce while waiting for the 14dma and 20dma to catch up before breaking out. However, sometimes prices seem to just break without waiting for their moving averages. So to determine if a break out is nearing indicators would provide some clues.

As we can see, prices have moved into the overbought region in Stochastics and Williams%R, with RSI just bordering it for quite awhile now, showing good momentum in this stock. Furthermore OBV has yet to dip. MACD however, looks like it intends to intersect, which may led to some buying. However that said, the OBV and W%R has flattened out. Normally, when W%R flattens out, it is likely to head down. 

A quick check with the chart below shows that the ADX indicates that the trend is very weak with neither buying and selling gaining any upper hand. Futhermore, the GMMA shows that there's some pressure ongoing in the short term moving averages as the lines have yet to separate proper. However, the lines do seem like they're beginning to spread indicating positive momentum starting up.

 

My take: 

It is possible that resistance will be taken out. However, I expect prices to remain trapped by the $1.64 - $1.61 range a bit longer supported by first the 14dma and then the 20dma, perhaps till mid or end of next week before clearer signals present themselves if a break out will occur. But for now, I don't think that will happen yet.

Again as mentioned in the last post, with "a P/E of 15 and yield of 3.25%, anyone buying into this for dividend yield may find SBS Transit a more enticing buy at the moment with a lower P/E and a better yield." That said, it may be better to find yields outside the transport sector. 

Not vested in either,

~K

P. S. I'm trying to decide is breakout one word or is it two? Does anyone know? =)

OSIM Making a Double Top or Ascending Triangle?

In my previous post on OSIM, I pointed out that "In the near term, stock price should continue to trend higher. But with decreasing volume, there may be a correction at hand." Refer to Will OSIM Dual Listing Plans Cause Price to Continue Rising?. Sure enough, prices rose for another three days before undergoing the anticipated correction as we can see from the chart below where I indicated when I made that statement with the blue arrow.

Currently price looks to be rolling over and forming either one of two formations - a double top or an ascending triangle.

To note, volume is still lower than compared to the previous time it reached resistance. This in no way helps bouy prices up to prevent the double top breaking down and sending prices lower from becoming a reality. Furthermore, from the MACD and Stochastics, prices may head lower in the short term. We will only know if the ill-result of the double top formation materializes should prices break below the neckline at $1.47. If so, prices are expected to drop further. However, the 50 day moving average which stands at ~$1.53 should provide some support which I expect prices to dip to judging from price behaviour.

That said, there seems to be some support at $1.62 as well as the 14dma (albeit looking weak). If this holds, we could see the formation of an ascending triangle instead. However, price movement today managed to push through this support to $1.60 before closing three cents higher to $1.63. This gives me mixed feelings at present. The next couple of days should give a clearer picture. If the ascending triangle pattern does hold, then a breakout would probably see prices head higher. This could occur as the market sentiment still remains bullish.

Not vested,

~K

BreadTalk Update

As expected, BreadTalk has broke through its resistance at $0.65 and out of its ascending triangle formation albeit sooner than anticipated (refer to BreadTalk Challenging Resistance and the chart below). 

This breakout has driven prices up. Prices are currently challenging the next resistance at $0.70 (refer to the chart below). When prices reached $0.70 previously, the 5-for-1 bonus shares issue caused prices to drop to $0.49 - an over-reaction by the market. Anyone who was braved enough then would have made a handsome profit by now. Also, anyone who entered at the 14 day moving average like I pointed out as a good entry point, would be sitting on some delightful paper profits now as well. Nonetheless, is there still room for the stock price to move up?

Well once again, we can see another ascending triangle formation. Any breakout would result most probably in another spurt. As mentioned in my last post on BreadTalk, volume is still very low. Previously I debated this low volume as either a weak push up or perhaps a lack of sellers as they hold the belief that the stock is more valuable than current prices.  With the price breaking out of its formation and resistance, and with prices still continuing to slowly creep upwards, this is leading me to believe the latter. With this reasoning, I believe it is still possible for prices to climb further. From the chart below, we can see that prices have hovered at resistance for the last four days. However, will it continue to move higher just yet?

Turning to the indicators for a clue, RSI shows BreadTalk stocks are pretty overbought at the moment while MFI and OBV suggests steady accumulation has been ongoing. Stochastics and MACD however, hint that some selling may be starting despite ADX indicating that the trend is currently relatively strong. Furthermore, ADX DI+ has dipped below ADX 14d supporting the view that selling may be occurring behind the scenes. Immediate support lies at $0.675. Next support lies at $0.66. 

My take: Prices looks likely to hover between immediate support and resistance for the next couple of days since profit taking may be taking place while waiting for the 14dma to catch up. The 14dma also provides some support should prices dip below $0.675. That said, I expect prices to break through the $0.70 and head higher thereafter. When this will happen is anyone's guess. My guess is that it will happen by the end of the month. Only time will tell if I'm right. 

Good luck everyone.

Vested,

~K

Starhub: Opportunity to Buy In May Be Near at Hand

In my last post on Starhub, (refer to Starhub Breakout in the Making?), I mentioned then that the opportunity to buy into the stock may have arrived but a dip to $2.63 may find it back in the downtrend channel. Prices did drop back and no confirmation of a breakout resulted, with prices dipping even lower currently to $2.57. 

That said, I also noted that the 100 day moving average has been providing strong support allowing prices to bounce up on the 21st of Dec to attempt breaking out of its downtrending channel. This didn't occur unfortunately. However, if we look at the chart, the opportunity may be close by. 

The 100dma has met the upper regions of the downtrend and may provide that extra push to prevent price from falling further. That said, indicators don't show any evidence that prices will head higher any time soon. Volume too, is much lower than the previous selloff on the 17th of Dec that resulted in the ugly black candle hinting at the probable lack of sellers. As such, we may find prices hovering around this region, bouncing from its 100dma support to its resistance at $2.65 before attempting a breakout. In other words, a triangle may result. 

As an income stock, with a dividend yield of 7.4% and a p/e of 13.8, Starhub is rather attractive as compared to its peers. However, maintaining its 20 cent/share dividend remains something of a concern to analysts.

Vested,

~K

Comfort Cab Speeding Up Too Fast?

On the 24th of Dec, I took a look at ComforDelgro's chart. Refer to Comfort Delgro's Climb to Resistance Looking a Tad Weak.  This was what I said I feel would happen, "my opinion is that prices may drop in the near term to its next support at $1.52 - $1.51." On hindsight now, this didn't happen. The 14 day moving average played a stronger support that I expected. I did also state that the ADX showed the selling trend was weak. This was probably a good clue that prices would hold up at the 14dma. A lesson on my part. That said, it did take one more dip back to the 14dma support despite crossing through the noted resistance at $1.57 showing that the initial challenge was indeed "a tad weak" and therefore heading for a mini-pullback.

I also stated that "as the market sentiment seems to be getting more bullish, my guess is that it would only be a matter of time before they push through the $1.57 resistance." Here's how that played out so far.

On the 06th of Jan, the resistance was finally taken out after hovering around the resistance for another week. If you notice, the 14dma has been providing strong support through the whole affair. Like any other breakout, this cause share price to spike leading it now to challenge its next resistance at $1.63. 14dma though, has yet to catch up. Some bulls are mighty optimistic. In the longer term, I'm convinced that they've every reason to be as the market sentiment is still bullish but in the short term, lets take a look at the indicators to gather the information.

Stochastics for one, is in the overbought region. Also, it has given a sell signal. RSI and MFI looks to be heading into overbought region as well. MACD however is still trending upwards, along with OBV. ADX indicates that buy momentum is rising but the trend strength is currently weak.

My take: As the 14dma has been providing strong support thus far, I expect this to continue. However as momentum is still positive, it is likely that instead of prices dropping back to its 14dma at $1.57, prices will continue hovering for the next couple of days while awaiting the 14dma to catch up with it. My estimate is for prices to bounce between $1.59 - $1.63. I do not expect the $1.63 resistance to be taken out just yet. With a P/E of 15 and yield of 3.25%, anyone buying into this for dividend yield may find SBS Transit a more enticing buy at the moment with a lower P/E and a better yield.

Not vested in either,

~K

Breadtalk Challenging Resistance

In my previous post on Breadtalk, Quick Post: Breadtalk Still In Uptrend, I mentioned that prices dipping to the 14 day moving average at $0.62 would be a good entry point for those who missed the $0.60 chance. 

Lets see how that played out.

Prices indeed bounced off $0.62 support and have now risen to challenge its resistance of $0.65 once again. But the biggest question on my mind is, "Will it succeed?"

The weekly chart shows that the uptrend is still intact, with moving averages aligned properly. However, price has moved higher than the 14dma which has been providing strong support. 

Turning to chart patterns:

Here, we continue to see an uptrend but it also seems that a triangle is about to complete its formation. With higher lows and resistance remaining the same, this is the third assault on the resistance.

Volume however has remained low through this which may indicate that the push is weak and that prices may fall back to its 14dma support before a fourth push upwards. That said, with volume remaining so low, it could indicate a lack of not only buyers but also sellers who realize the value of their company and are not letting the shares go without demanding better prices. As such, prices may hover around the $0.65 resistance for a couple of days to allow the 14dma to catch up, completing the triangle formation and breaking out thereafter. Furthermore, a golden cross between the 14dma and 50dma looks to be soon. This may provide the push to break out of the resistance.

Onto indicators:

Despite prices being at the top of the Bollinger Band range, Parabolic S&R indicates buying momentum still present. However, ADX doesn't show any strength in the trend. Furthermore, RSI and Stochastics are in overbought regions which increases the chance of a short term pullback. OBV has been gradually rising which is an indication of accumulation. MFI too has risen higher. It was in oversold regions since mid-Nov. Currently, it is starting to round which may indicate profit taking. Like the OBV and MFI, the MACD is gradually rising as well. However, there is no signal to buy or sell and doesn't look like it'll provide a signal any time soon.

My take: With all the info provided, I personally feel that prices are not going to break through resistance just yet. However, it's looks more and more likely that the resistance will be broken which I expect to happen within the month. The 14dma still provides a good entry point for now to anyone interested. Should the price break resistance, prices are expected to head upwards thereafter.

~K

Quick Post: Starhill Global REIT Still Rising?

Quick Post:

As my holdings in Starhill Global isn't for trading reasons, I'm more concerned at the longer term view of the stock. 

This is the fourth time Starhill Global is challenging current resistance at $0.625. All the failed attempts saw the stock making higher lows with support increasing in bouts of $0.005 - from $0.605 to $0.61 to $0.615 to its current price of $0.62. We also see the formation of an ascending triangle which suggests prices may breakout and rise further.

Here's the weekly chart for a clearer view:

Furthermore, all moving averages are lined up positively indicating that the uptrend is still intact.

Fundamentally, the numbers are as such:

Share Price: $0.625

NAV: $0.89

Price to Book: 0.702

Discount to NAV: 30%

Gearing: 31%

Interest Cover: 3.4 (FY) , 3.06 (9mth)

Dividend Yield: 6.352%

We also know Singapore's economy is picking up and there has been an increase in the number of tourists. Furthermore, locationwise, Starhill Global occupies probably the next best plot in Orchard, with Wisma and Ngee Ann City standing right next to CapitaMall's Ion Orchard shopping centre. 

My take: With this in mind, Starhill Global, being undervalued, is still a good investment currently with a higher chance that prices will continue to trend upwards. Furthermore, gearing and interest cover are  comfortable. However, you may want to enter at the support prices. That said, the breakout may be arriving soon.

Cheers,

~K

Singtel Rebounds

In my last post on Singtel, I mentioned that prices look set for a rebound and I was very tempted to buy in at that price of $3.04 with the 200 day moving average supporting more selling. (See Singtel Attractive? for discussion.) True enough, Singtel bottomed then and have broke through the $3.08 resistance pointed out. See chart below for a clearer picture.

With MACD providing a buy signal and Stochastics crossing the oversold region, prices may rebound even higher to find support at its 100dma where it was formerly before going XD. However, with what seems like a wedge forming, price must not to drop back to close below $3.09 to avoid being caught in this which may eventually send prices even lower. Though it seems unlikely to happen with the bottoming of the RSI and a pick up of volume, MFI and ADX has yet to turn up convincingly. Should prices close above $3.09, it is likely that prices will continue trending upwards. 

Again with PE being less expensive than its peers at 12.6, Singtel could be more attractive as a buy than the other two especially with a historical PE average of 13.4. However, the higher yields offered by Starhub at 7.2% and M1 at 5.7% compared to Singtel's low 4.6%, may delay the realization of its value.

Still waiting for a 5-6% yield and not vested,

~K

Starhub Breakout in the Making?

Since my last post on Starhub (see Two Extremes: Starhub - Falling Star, Singpost - Blasting Off! for discussion), thankfully, what could have been the start of a steeper downtrend didn't materialize and prices bounced back to into its channel. The weekly chart below provides a clearer picture.

As seen above, Starhub has reached the upper regions of the channel and may well be poised to break out. In the daily chart below, we see the breakout occuring yesterday with price closing higher than the channel lines.

With the MACD giving a buy signal and turning up, a double bottoming of the RSI on the 17th and 22nd of Dec which is now rising, together with the OBV and Stochastics, it may jolly well be the opportunity to enter this stock. However, as ADX doesn't show a strong trend and with MFI yet to turn up, if this is nothing more than a rebound, a drop back to $2.63 may see the price back in the channel with the 100 day moving average providing support. Only time will tell.

That said, the announcement this morning in Today papers of Starhub's multi-year, multi-million dollar deal sealed to service Marina Bay Sands, may be the catalyst for stock prices to rise.

Cheers,

~K

Time to Enter Raffles Medical Group?

Founded in 1976, Raffles Medical Group has grown to be Singapore's largest private group practice operating a network of family medicine clinics, a tertiary care private hospital, insurance services and a consumer healthcare division serving over 1 million patients and 5,500 corporate clients today. (For a recent fundamental analysis of RMG, refer to Singapore Investor's blog post entitled Raffles Medical Group.)

Since making the triple bottom in Jan - Feb, Raffles Medical Group has been on an uptrend. From the chart below, it is clear that prices are moving in a channel and that prices are currently at the bottom of it. As the trend is your friend, this may provide a good buying opportunity for traders who are looking to get into this stock and eager to ride the major trend. 

The weekly chart below shows a clearer picture of this uptrending channel.

Turning to the chart below, current support seems to be the 14 day moving average at $2.36. Indicatorwise, Stochastics, MACD, OBV and MFI all seem to be turning up. Positive DI of the ADX looks set to cut the negative DI indicating buying momentum. Parabolic supports this. These could indicate that prices are going to move up further in attempt to challenge resistance at $2.44 before taking on its 52-week high at $2.52. Trend strength however is lacking. RSI too, seems to be making a lower high which may indicate a pullback in price in the short term to the 14dma. A dip below the 14dma, could see prices moving to its previous support at $2.32, and $2.30 thereafter. A break below $2.30 could signal the end of its uptrend and could send prices down to its next support at $2.24. A stop loss would prove most useful due to the uncertainty.

My take: Personally, with a P/E of 33, yield of only 1.4% and price to book ratio of 4.6, despite a goal of holding the stock for the long term, the stock is too expensive. Shall wait for a crash to bring prices down before investing in it. Will use the time to save up for that chance when it presents itself.

In the short term, prices may pull back to its 14dma which would provide a favourable entry point. Also, the mini-trend starting on the 1st of Dec sees the stock making higher lows, and as the market sentiment seems to be getting more bullish, I expect prices to head higher soon.

Not vested,

~K

CapitaMall REIT Making A Double Bottom

In the last chart on the 27th of Nov, I mentioned that CapitaMall was downtrending. Also to quote the entire paragraph for refresher sake, I posted that "the past three days have seen price seemingly stabilizing at $1.86 support, in hopes of rebounding upwards. A break below this may see price retreating to the next support at $1.81. To break out of the downtrend, price must head above $1.93. Only then can we expect price to head higher." See CapitaMall REIT in Trouble for further discussion.

On the 30th of Nov, prices dipped to $1.82 but broke out of its downtrend on the 2nd of Dec, closing at $1.96. After stabilizing for the next 2 weeks at $1.94 thereabouts, prices dipped back down to $1.85 on lower volume than the last dip to $1.82 suggesting that prices had reached a bottom. 

Today's charts indicate that a double bottom may have indeed been formed and prices are set to head upwards. Furthermore, indicators are all favourable. MACD and Stochastics have given a buy signal. RSI and OBV looks to be heading higher while MFI seems to have bottomed as well. This increases the odds of prices rising. Support seems to be at the 14 day moving average at $1.90. Resistance remains at $1.97. The crossing of the 14dma with the 200dma should send prices higher but is not in sight at the moment. 

Again with a yield of only 4.85% and price to book ratio of 1.28, I'm not interested in the stock however, traders interested in capital gains may want to consider this. 

Not vested.

~K

CapitaMall started at Overweight by HSBC, target $2.22
Friday, 10 December 2010

© 2010 - The Edge Singapore

Quick Post: Breadtalk Still in Uptrend

Quick post:

As readers would know, I've been following Breadtalk and have vested interest in this company. 

In my last post, I mentioned that prices seem to be in an uptrend channel. See Breadtalk Dips But What Next? for further discussion.

The last time I mentioned that a buying opportunity may be presenting itself (see Breadtalk Buying Opportunity Soon), prices dipped to the bottom of the uptrending channel as well at $0.60. Today a look at the chart without all the other indicators shows a doji forming very near the base of the channel again.

A look at the weekly chart shows this uptrend very clearly with the 14 day moving average supporting the climb. 

This could be another buying opportunity for anyone looking to be invested before price head higher.

That's it for now on Breadtalk.

What did I tell ya? Quick post.

Cheers,

~K

Comfort Delgro's Climb To Resistance Looking A Tad Weak

Good evening everyone,

Today the world's second largest transport company and Asia's largest, Comfort Delgro, price movement caught my eye.

Macro view of the chart without the clutter of the indicators, shows prices are up looking like its trying to overcome resistance at $1.57 with prices closing at its 14 day moving average at $1.54 acting as support. The last time it encountered this resistance on the 17th of Nov, the bears won, dropping prices drastically to $1.45. However, we see that the bulls have been driving the price back up. However take note the divergence between volume and price movement. Danger sign no. 1. This was the same issue with Ascott REIT which I pointed out in my previous posts - Ascott REIT Making A Weak Leap and Ascott's Bounce Unsuccessful - which was proven correct. Does it always work this way? No. But it's a reason to be cautious.

Turning our attention to the indicators of the chart, we see Parabolic indicating buying momentum which is true since price has been ascending. Also, 50dma looks like it intends to form a golden cross  with the 200dma, which is a good thing but it doesn't look like it's going to cross by the end of this week. Stochastics however, seemed to have turned up looking like it'll cross and give a buy signal tomorrow. It has also been forming higher lows, a good sign. That's good news folks.

Next, the bad news. RSI, MACD, OBV and MFI all look to be heading down. Furthermore, despite the positive cut from Stochastics, MACD is cutting negatively. The bars are also inverting into negative territory. MFI looks to be forming lower lows, which is also a divergence from the price uptrend. Another danger sign. Lastly ADX shows selling indicator climbing a possible sign that selling is strengthening. The bright side to this is that the trend is weak so far.

My take: From the looks of it, my opinion is that prices may drop in the near term possibly to its next support at $1.52 - $1.51. However, as the market sentiment seems to be getting more bullish, my guess is that it would only be a matter of time before they push through the $1.57 resistance. However, though unlikely, a break below this could send prices to $1.49 and then to $1.45 if the bulls don't show up by then. Personally with a yield of only 3.4%, I wouldn't think of investing into this for income just yet. I like the company but I'm patiently waiting for another crash before being vested. I'm in no hurry. The waiting game allows me to build up my cash till then.

Not vested (like you didn't figure that out by now haha)

Cheers,

~K

Singtel Attractive?

Well it's the wee wee hours of the morning, 4.10am to be exact. *yawnz* I've just finished watching Day 2 of the Roger Federer vs Rafael Nadal exhibition match in bid to raise money for charity in Africa. Enjoyable match I must say. Light-hearted yet well played with some amazing shots and teases. Well done to both athletes. 

Anyway I'll make this post quick before I head for a shower and then to bed. Late night showers aren't good so says my mother but hey it's not late when it's so early in the morning huh? =X

So on to the today's observations.

I've been eyeing Singtel for a long time now for diversification as well as an income stock for its steady dividends and low payout ratio, not to mention its relatively low gearing compared to its closest rival Starhub (which I am invested in). Not going to do any financial analysis here but suffice to say that it's a rather stable company. For a more detailed analysis on Singapore telcos, I recommend reading these two post from Investment Moats blog entitled Yield Watch: Comparing Telecom Stocks Around The World and A Guide To Dividend Investing In Singapore Telecom Stocks. They're gems.

From the chart, price closed at its 200 day moving average again today at $3.04 for the second day in a row. Also, candlestick shows a doji which may indicate a reversal at hand. Furthermore, on both days, the lower wick dipped only one cent less to $3.03 perhaps an indication of the demand of the shares when prices drop lower. 

But if we scrutinize once more, prices encountered their first big resistance on 9th of Nov at $3.31, driving prices down to their 100dma. The subseqent rebound saw prices encounter resistance on 9th of Dec at $3.17 before dropping lower further. Could this then be a start of a downtrend for Singtel? Perhaps but we have to take into consideration that Singtel went XD on the 21st of Dec. As such it is only natural for share prices to drop. 

It is expected that share prices drop by the amount of dividends paid per share. In this case, Singtel is paying out a 6c as dividends. Therefore, it is reasonable for the share price to take a trip down to the 200dma we see today. If the stock had not gone XD, it is probable that the 100dma would have held as was the case before and may most likely have made a double bottom. 

That said, the 14dma looks set to form a dead cross with the 100dma which may cause some people to sell when that happens. However, normally I don't really bother much about the 100dma. As a long term investor I prefer looking at the 200dma. Now if that crosses, then I might consider selling. Personal rule, don't worry about it. =)

Turning to indicators, Parabolic shows selling in process. However Bollinger bands show that prices are at the bottom of the range. Stochastics is in oversold regions with the RSI bordering it. MACD is in negative territory with no indication of crossing or turning up anytime soon. OBV seems to have bottomed and is now plateauing out while MFI has reached its previous bottom with no indication of smoothing out just yet. However, OBV and MFI made a lower high which is not a good thing. On the bright side though, ADX shows that selling strength is rather weak.

My take: Well, I am quite tempted to buy at current prices but that's just my emotions talking. This is because there could be a rebound around the corner when Stochastics cross. Furthermore, the current price has been tested twice before making this the third time prices are testing this support. However, it's not possible to tell what price it will head up to when the rebound does occur. Resistance lies at about $3.08 and then at $3.15. But as I have my own rules, and though I like dividends, I'm waiting for yield to increase to at least 5 - 6%. Keeping up with inflation you see heh. For now I'm sitting this one out. But for anyone who's keen or happy with the current 4.6%, you can try nibbling if you believe the 200dma will hold.

Not vested. Goodnight everyone or should I say, good morning =)

~K